U.S. equity futures slipped lower Monday, while oil prices extended their near-term rally into a ninth consecutive week, as concerns over surging inflation pressures and the weakest China growth rate in more than a year tamed optimism linked to a strong start to the third quarter earnings season.
China posted its weakest growth rate in more than a year overnight as a rolling power crisis, supply chain disruptions and a crackdown on the tech sector combined to slow third quarter GDP to just 4.9%, the weakest since the pandemic trough of 2020.
Tougher emissions standards, as well as a reported supply shortage, have lifted coal prices to an all-time high, triggering both a surge in substitute energy prices and the ongoing power crisis, which is limiting industrial output as factories are forced to close and shop floors go dark.
The weak China data, as well as concerns over faster inflation, fueled in part by surging power prices, triggered both a warning on interest rates from the Bank of England and a pullback in regional markets, with the Stoxx 600 falling 0.5% by mid-day trading in Frankfurt.
On Wall Street, earnings will take center-stage again this week with around 78 S&P 500 companies reporting September-quarter profits, including tech heavyweights Tesla (TSLA) – Get Tesla Inc Report, Netflix (NFLX) – Get Netflix, Inc. (NFLX) Report, IBM (IBM) – Get International Business Machines (IBM) Report and Intel (INTC) – Get Intel Corporation (INTC) Report along with Johnson & Johnson (JNJ) – Get Johnson & Johnson (JNJ) Report, AT&T (T) – Get AT&T Inc. Report and Procter & Gamble (PG) – Get Procter & Gamble Company Report.
Last week’s stronger-than-expected bank earnings have lifted collective profit forecasts for the S&P 500, with analysts now looking for third quarter earnings to rise 32% from last year to $421.4 billion.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 110 point opening bell dip while those tied to the S&P 500, coming off its best week since July, are priced for a 13 point retreat. Nasdaq Composite futures, meanwhile, are set for a 33 point slide as benchmark 10-year note yields rose to 1.602% in overnight trading.
Apple (AAPL) – Get Apple Inc. (AAPL) Report shares edged lower Monday ahead of the tech giant’s second major launch event of the autumn — ‘Unleashed” — where it is expected to unveil the first redesign of its MacBook Pro laptop in at least five years.
Biogen (BIIB) – Get Biogen Inc. Report shares moved lower after the drugmaker said late-stage tests of its experimental treatment of certain forms of Lou Gehrig’s disease for failed to meet expectations, but showed enough promise for a follow-on trial.
Walt Disney Co (DIS) – Get Walt Disney Company Report shares fell 1.75% after analysts at Barclays lowered their rating and price target on the media and entertainment group, citing slower growth from its Disney+ streaming service.
U.S. Steel Corp (X) – Get United States…
Read More: Stock Market Today: Dow Lower On China GDP; Q3 Earnings In Focus